Inflation predicted to stay below 4 percent in 2018: Ministry
Updated : Thursday, January 04, 2018 2:37 PM (GMT+0700)

TheMinistry of Finance (MoF) has outlined three scenarios for inflation in 2018,with the consumer price index (CPI) in all circumstances staying below 4percent, the target set by the National Assembly.

 
Illustrative image - Source: VNA

In the first scenario, foodprices are expected to remain relatively stable and only rise slightly duringthe holidays.

Hikes in health care costsin the first quarter are projected to increase the CPI by 0.17 percent, whilewage increases and higher power costs will drive up the CPI by 0.14 percent and0.1 percent respectively.

A 5 percent increase each inpetrol and gas prices will lift the CPI by 0.28 percent and 0.06 percentrespectively.

After factoring in theseprice rises, the average CPI in 2018 is expected to rise by 3 percent.

In the second scenario,which is largely the same as the first one, with the exception that pork pricesrise by 7 percent at the end of the year and petrol and gas prices increase by10 percent, the average CPI in 2018 will rise by 3.4 percent.

Meanwhile the average CPIwill increase by 3.9 percent in the third scenario, assuming a 15 percent risein pork prices and 15 percent hikes in petrol and gas prices with other priceincreases the same as in the first scenario.

According to the GeneralStatistics Office (GSO), Vietnam’s average inflation in 2017 fell from 5.22percent in January to 3.61 percent in November.

The year 2017 is considereda successful year in inflation control, as the average CPI increased 3.53percent over 2016 and 2.6 per cent compared to December 2016, fulfilling thetarget of keeping the rate under 4 percent for the whole year, GSO Nguyen BichLam said during a meeting last week.

Lam pointed out majorreasons behind the CPI rise, including hikes in the prices of health care andeducation services, as well as an increase in regional minimum wage.

At the same time, domesticfuel prices in 2017 rose 15.49 percent compared to 2016, contributing 0.64percent in CPI increase for the whole year.

The price of constructionmaterials was up 5.23 percent due to increases in the prices of sand and steel.Rising prices of essential goods in the global market also pushed the importprice index up by 2.57 percent and export price index up by 2.93 percent; theProducer Price Index (PPI) expanded by 2.82 percent.

Lam underscored that arecord number of 16 storms were seen in 2017, which pushed up the prices offood and foodstuff in affected localities, especially central provinces.

Meanwhile, there were anumber of factors helping rein in inflation, including a downturn of 2.6percent in food prices in 2017, helping reduce the overall CPI by about 0.53percent.

GSO Director Nguyen Bich Lamattributed the success in meeting the inflation target for the year to effortsof ministries in encouraging businesses’ involvement in stocking goods andstabilising the market.

The Ministry of Finance hadkept a close watch on market developments, while coordinating with the Ministryof Industry and Trade to manage fuel prices, he said.

Source:VNA

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